‘A lot of red flags’: plans for New Zealand’s first datacentre spark concern as locals demand greater transparency | New Zealand

People living near the site of New Zealand’s first AI data center are calling for more transparency about the project, particularly about how the centre’s massive electricity and water usage and potential noise pollution could affect them.

Singapore-based company Datagrid has received approval to build a NZ$3.5 billion (US$2 billion) AI data center on a 49-hectare site in Makarewa, just north of New Zealand’s southernmost city Invercargill. Construction is planned to start this year and the center will be operational in 2028.

The company’s website states that the facility will be used for AI training, processing and data storage and will serve global AI and cloud providers. Datagrid also plans to install a high-speed internet cable between Invercargill and Australia.

Data centers require large amounts of electricity, water and land, and their rapid growth is sparking controversy and protests around the world as communities grapple with associated environmental issues, rising electricity bills and data companies claiming they are not seeing local economic benefits despite their promises.

The center at Makarewa will be New Zealand’s second largest user of electricity after the nearby Tiwai Point aluminum smelter, using 280MW of electricity.

Local officials hailed the project as a win for the region, saying it would create jobs and speed up the internet. The company says approximately 1,200 jobs will be created during the construction phase and approximately 50 permanent positions will be created when construction is completed.

But economic geographer Angus Dowell, whose PhD project examines the construction of data centres, said there were “many red flags” about the project and New Zealand’s push to become an AI hub.

“[The centres] “They provide short-term economic benefits in the form of construction, but they are very, very low employers in the long term, and so the long-term benefits for local economic development are not quite there, they don’t add up,” he said.

Citizens living in the surrounding neighborhoods are worried about the developments.

“Locals here feel like our region is being sold out from under us,” said Kelly Blomfield, president of the Southland Sustainable Resource coalition, an advocacy group that monitors regional infrastructure projects.

“I think most people’s main concern is that we won’t know anything until this is over,” he said, adding that attempts to gather more information from Datagrid were unsuccessful.

The center is part of the New Zealand government’s initiatives to attract foreign investment and create data centres. Government body Invest New Zealand is looking to secure NZ$25-30 billion in foreign investment to build data centers and AI infrastructure, the agency said.

The agency’s website says New Zealand offers a “compelling opportunity” and a “safe haven” for investment due to its access to renewable energy, available land and cool climate.

“These foundations are underpinned by excellent digital connectivity, a skilled workforce, internationally competitive pricing and a strong rule of law.”

Meanwhile, a report prepared for the agency by Boston Consulting Group claims that the sector “could unlock up to $70 billion in economic activity” over the next decade.

But Makarewa resident Amanda, who only wanted to give her first name, says her initial hesitancy about the project has now turned to concern.

“I panicked because I now knew so much more than what I had seen abroad… not just for Makarewa, but for New Zealand as well.”

Amanda is concerned about water and electricity usage, the ability to run 84 diesel generators in the event of a power outage, and how noise and light 24 hours a day will affect the community and livestock.

Data grid It has approval to discharge air pollutants from up to 84 diesel backup generators, extract up to 604,800 liters of groundwater per day, discharge up to 5000 liters of treated wastewater per day and clean up a nearby wetland, Environment Southland regional council reports.

He said that while direct neighbors of the data center site were consulted, the wider community was not consulted and anti-data center sentiment was growing.

“I know a lot of people in the community who disagree; the talk is either concern or negativity.”

Blomfield says he feels New Zealand has put itself in the race to become an AI data center hub “but no one has asked us if we want to be in that race.”

“People are starting to understand the scope of this and are starting to say: I don’t want this in my backyard.”

Datagrid did not respond to the Guardian’s request for comment, but its CEO, Rémi Galasso, said: it has been said before It was stated that concerns about water and energy use were unfounded. He said the Southland’s cool climate minimizes the need to use water and the company will operate under long-term renewable energy regulations rather than competing for household electricity.

Invest New Zealand chief executive Robert Wall was not available for an interview.

Dowell says there isn’t “a lot of transparency” around the Datagrid project, which raises questions about its impacts, how it will work within the wider AI ecosystem and how it will benefit New Zealand.

“It’s fair for us to look at other parts of the world and see the environmental impacts of data centers, the highly skewed distribution of value as part of the big tech AI economy, and say: We need to know more,” he said.

“We must demand more because there is so much at stake.”